Trader Joe’s appears to be slashing prices, which could put new pricing pressure on Whole Foods Market, according to Deutsche Bank analysts.
Business Insider reports that Deutsche Bank analysts checked the prices on 77 similar items at a New York-based Trader Joe’s store and nearby Whole Foods and found that Trader Joe’s was about 26% cheaper. The basket at Trader Joe’s was $240 while the one at Whole Foods was $303.
That’s a wider price gap than in previous checks, leading analysts to believe that Trader Joe’s is implementing across-the-board price cuts, similar to what the company did a couple of years ago.
In 2013, when Trader Joe’s reached about 300 stores in the US, the retailer slashed prices across roughly 200 items. The move “caught [Whole Foods] off guard” and forced it to follow suit with its own price cuts on similar items, according to Deutsche Bank analyst Karen Short.
Now that Trader Joe’s has about 500 stores open, the company appears to be slashing prices again. “TJ’s might be once again catching Whole Foods Market off guard because prior checks have not shown such disparity,” Short wrote in a research note.
In Baton Rouge, Trader Joe’s and Whole Foods are active competitors, though the latter has been in the market for much longer. Whole Foods opened at Towne Center in the summer of 2005, while Trader Joe’s opened in the Acadian Village Shopping Center in 2013.
Trader Joe’s did not immediately respond to a request for comment from Business Insider. The store’s prices were 30% cheaper than Whole Foods for perishables and 24% cheaper for nonperishables, according to the price check. Trader Joe’s private-label items were also 15% cheaper than Whole Foods’ 365 private-label goods.
